Making the Tourism Connection
Question: An aquarium in Atlanta. A Ferris wheel in London. A mega-sporting goods store in Oklahoma City. What do these things have in common?
Answer: They were all attractions that benefit their communities as catalysts for economic development.
Not long ago, many people thought of economic development as industrial development – the creation of factories, office buildings, and other traditional commercial enterprises. Now, economic development professionals and attraction operators speak a common language–tourism. And that’s no surprise, when you think about the potential benefits that both can find with shared efforts to grow their destinations.
Tourism is big business. According to the Travel Industry Association (TIA), tourism is one of America’s largest industries, with nearly $700 Billion in direct travel expenditures. Some additional statistics from TIA’s 2007 Economic Review of Travel in America:
- Travel-generated payroll: $178.1 Billion
- Travel-generated employment: 7,543,000 Jobs
- Travel-generated tax revenue (total): $109.9 Billion
- Travel-generated tax revenue (state): $31.0 Billion
- Travel-generated tax revenue (local): $18.3 Billion
According to TIA, each household in America would pay $965 more in taxes without the tax revenue generated by the travel and tourism industry.
With stakes this high, it’s no wonder that many communities are becoming proactive in seeking a larger slice of the tourism pie. These communities are strategizing, planning, and in some cases developing their own new tourism products.
By the same token, attractions of all kinds have begun to measure their effectiveness as catalysts for tourism. They estimate the number of room nights generated, and research their expansions for potential to draw travelers from key feeder markets.
This issue of Destinology explores the connections between economic development and tourism. We examine how organizations such as Central Atlanta Progress, the Baton Rouge Area Foundation, and the Niagara Parks Commission act in entrepreneurial ways to develop new attractions for the benefit of their communities. And we will outline some of the techniques used to plan and fund new attractions, as well as measuring results from these initiatives.
Audubon Alive is Announced
(BRAF)
Audubon Alive will be boosting Baton Rouge, Louisiana… thanks to visionary leadership provided by the Baton Rouge Area Foundation (BRAF), a community foundation with close to $600 million in assets. John Davies, president and CEO of BRAF, explains, “We ensure our philanthropic clients realize great satisfaction by making a difference and advancing our community.”
Since Katrina in 2005, Davies and key community leaders in both Baton Rouge and New Orleans have been working on ways to come together as a region and rebuild the state’s economy. Davies and Ron Forman, president and CEO of the widely recognized Audubon Nature Institute in New Orleans, considered an expanded Institute footprint. As a result, BRAF, with the support of numerous coalitions, became the primary planner of Audubon ALIVE, a unique new entertainment and education center that will be the first large tourist destination in Baton Rouge.
The attraction is designed to connect people to the majesty of nature and is expected to draw hundreds of thousands of visitors each year. The 220,000-square-foot building will be constructed on the riverfront and offer four themed venues: Earth, Wind, Fire and Water. Special exciting experiences include a hands-on aquarium, jungle with live tigers and jaguars, “swamp” exhibit, “predator” roller coaster ride, hang glider IMAX ride, “storm” education facility, and local cultural and heritage activities. PGAV Destination Consulting was engaged to develop this new tourism product, combining the strengths of Baton Rouge with the focus of the Audubon Nature Institute.
When completed in 2012, Audubon ALIVE will become a significant economic driver for the city of Baton Rouge. An economic impact study by the Audubon Nature Institute predicts $575 million in new spending in the first four years, resulting in $30 million in taxes. Job creation would generate an additional $167 million during the same time period through net earnings. Further private investment opportunities in the form of restaurants, hotels and new attractions will arise. The project will cost approximately $300 million and is a major component of the $989 million bond proposition to be on the November 4, 2008 ballot.
“Ten years ago, people thought a movie theater might do the trick for street life; what we really need is something big with energy and excitement. Now, we’re reinventing downtown to be a stunning area. Along with the Shaw Center of the Arts and revived Hilton, Audubon ALIVE will be a point of pride with incredible impact. Everyone’s talking about it.” says Davies.
Seizing the Destination Opportunity
“The new Georgia Aquarium has changed Atlanta forever. It brought us a destination opportunity and enabled us to become more than a meeting/convention city,” says A.J. Robinson, President, Central Atlanta Progress. The aquarium, in tandem with other joint public/private partnerships to reinvigorate the Central Business District (CBD), is a magnet for residents and tourists alike, producing a tsunami of development in the area.
“We live in a Destination Economy. Cities around the globe are developing new sports centers, cultural facilities, and other destination products as a way to brand their CBDs and be more competitive,” notes Mike Konzen, PGAV Destination Consulting Vice President.
The growing importance of the tourism industry – with a multi-billion dollar impact on our economy – has prompted many communities to create new tourist attractions, or strengthen existing ones, as part of larger economic development strategies. As cities compete more aggressively for visitors’ limited leisure time, they are using destination tourism to boost growth and reinvent themselves. For example, the more than 3 million visitors that ride the 443-foot tall “London Eye” Ferris wheel each year, experience the city in a totally new way. Similarly, The Bilbao Guggenheim – part of a comprehensive program to transform this former gritty, down-at-the heels industrial city into a world famous tourist mecca – became an instant icon for the city.
Communities throughout North America are using entrepreneurial strategies to develop sustainable growth through tourism. This article examines some of the tools that such communities use to transform themselves into state-of-the art destinations.
Destination Assessment
The Missouri Department of Economic Development wanted to help smaller communities throughout the state unlock the destination tourism potential of their downtowns to boost overall economic development. As a first step, “destination assessments” were conducted that analyzed both challenges and opportunities and explored different strategies to create new attractions and strengthen existing ones that would succeed in the marketplace.
“One of the most important lessons learned,” notes John Brancaglione, PGAV Urban Consulting Vice President, “is that each community is unique. No one size fits all.”
A destination assessment typically examines a wide range of factors, including a destination’s brand and promotional practices and its visitor infrastructure, such as signage and lodging facilities. Most importantly, this process evaluates the strength and mix of attractions in which tourists can engage when they visit.
In the case of Washington, Missouri, the city is now rebuilding its corn cob pipe factory – the only one of this type in the world – on a site downtown as part of a larger economic development program to draw visitors to the city and strengthen existing attractions in the downtown. In Hermann, Missouri, where tourism is the primary driver, PGAV is working with the city to take advantage of the burgeoning local wine industry.
Product Development
The development of any tourism product – whether museums, aquariums, visitor centers, special events, or special tours – requires a multi-faceted approach involving creativity, analysis, effective design, and good business planning. PGAV has configured its practice to encompass all these disciplines. Further, to be truly successful, a new product has to be unique, highly marketable, and geared to appeal strongly to its target audience.
Consumer testing helps get inside the heads of potential customers and understand their motivations, expectations, and needs. In the case of one study on Gen-X’ers, PGAV found that these especially time-pressed leisure customers seek to get the most from their experience. Gen-X’ers want increasing amount of control of their time. They want choices.
PGAV applied these findings to their inventive hub-and-spoke design for the galleries at The Georgia Aquarium, where visitors can select the ones they want to see in the order they prefer and thus shape their experience at the aquarium.
Financial Tool Box
“Many communities are unaware, or inexperienced in using the variety of financial tools – tax increment financing, hotel/motel tax, historic tax credits, incentives for cleaning Brownfield sites, car rental taxes – that are available for economic development,” observes Brancaglione.
As part of their effort to transform downtown Oklahoma City into an entertainment destination, the city planned a large mixed-use development attraction in the Bricktown warehouse district. To galvanize the development, the city needed a strong destination retailer. Bass Pro Shops was interested, but wanted significant public incentives and was exploring competing sites in the suburbs. “This was the first major project of this type we had done,” says Cathy O’Connor, Assistant City Manager & Finance Director, Oklahoma City. “We hired PGAV to help us analyze our different financial options and show us how other cities structure similar public/private deals.” PGAV did an economic impact analysis that compared the economic incentives the city would provide with the benefits that would accrue from the project.
Measurable Results
“To measure the success of a destination program,” says Tom Owen, PGAV senior designer, “one must look beyond the benefits of a specific attraction and consider the larger economic development effects on the community as a whole, many of which can be measured.” Eighteen months after opening, The Georgia Aquarium helped bring millions of new visitors downtown each year; Atlanta experienced a 7.5% increase in hotel occupancy rates, along with $138 MM in existing hotel renovations and six new hotels planned for the area, plus 50% increase in nearby attractions.
Likewise, a main benefit of Missouri’s Downtown Revitalization and Economic Assistance (DREAM) initiative has been to “capture the attention of the development community,” says Sallie Hemenway, Director of Operations, Missouri Department of Economic Development. The $35MM in public money invested in the program since 2006 has generated more than $200MM in private investment.
In the case of Oklahoma City, “Bass Pro and the mixed-use development has made a huge difference in our downtown,” says O’Connor. “Before this major development, visitors attending a ball game had nothing else to do downtown. Now we have a new movie theater, hotel, restaurants, and shopping. And our Bass Pro store is generating the type of visitor traffic we wanted. This project was also important to convince people that retail could work again in our downtown,” adds O’Connor.
In conclusion, a successful destination-based economic growth program requires a number of important steps – conducting a destination assessment, destination product development, and developing a financial tool box to implement and sustain the program – all of which produce measurable results that benefit the larger community.
If You Build It (and Fund It), They Will Come
“Ray, people will come Ray. They’ll come to Iowa for reasons they can’t even fathom. They’ll turn up your driveway not knowing for sure why they’re doing it. They’ll arrive at your door as innocent as children, longing for the past. Of course, we won’t mind if you look around, you’ll say. It’s only $20 per person. They’ll pass over the money without even thinking about it: for it is money they have and peace they lack.” – James Earl Jones as Terrence Mann, Field of Dreams
Phil Alden Robinson’s 1989 Movie “Field of Dreams” intones the mantra of tourism-based product development: “If you build it, they will come.”
Nationwide, an increasing number of communities are pursuing the “Field of Dreams” approach to tourism, primarily by investing in new product development. According to Travel Industry Association Vice President Patty Hubbard, “We see a dramatic increase in community-based initiatives to bolster local and regional economies through tourism development. And these communities know that to become more effective travel destinations, they need to invest in good promotional strategies and great tourism products, such as attractions.”
Local and regional communities are becoming increasingly proactive in strategizing, planning, developing and funding new products. To stimulate economic growth, they are promoting the development of new attractions, as well as the dramatic improvements to existing attractions.
In Asheville, North Carolina, The Health Adventure (THA) received $1.5MM from the Buncombe County Tourism Development Authority from their Tourism Product Development fund for Momentum, a new science and health attraction. Since 2002, this occupancy tax-generated fund has contributed more than $9MM for a wide variety of projects. As part of its application for these funds, THA estimated that the project would generate an additional 22,000 room nights per year. According to THA President and CEO, Paige Johnson, “We had to do a great deal of research through consultants as well as focus groups to be able to prove our project’s viability as a new tourism product.”
In Fishers, Indiana, Conner Prairie received $45,000 for research and a subsequent $500,000 for product development from the Hamilton County Convention and Visitors Bureau. These funds have assisted in both planning and development of improvements to this living history museum. According to Conner Prairie CEO Ellen Rosenthal, “The Hamilton County Convention and Visitors Bureau deployed its funding through grants to become a real force for thoughtful, measured product development… In effect, the Bureau became our partner in increasing our museum’s tourism potential.”
A.J. Robinson
President, Central Atlanta Progress, Atlanta Downtown Improvement District
Describe your path to the presidency.
I suppose I was drafted. When a leadership position opened here in 2002, everyone said I should take it. For over 20 years, I was part of Portman Holdings and Portman Development in Atlanta, the last eight years or so as president. I acquired a great love for this community during its impressive transformation.
What’s it like working for a nonprofit?
A nonprofit organization differs from one that produces product. We represent a broad coalition of interests, so building consensus takes time and patience. Then, we have to sell that consensus to various public agencies. We have to be nimble in dealing with constituents, as we work together to create a strong central city. I believe one day, people will reflect back and consider this an important era when things got done.
Why is the Georgia Aquarium so important?
Mr. Marcus had his pick of prime places. We connected him with Coca-Cola and when both parties could see the value, Coca-Cola provided the land. The Aquarium is wildly successful in great part because of PGAV’s creative work, and with the coming expansion, it will be a $400 million investment in a tourist attraction for the state.
How do you evaluate an attraction’s impact?
There are levels of impact, including psychology, tourism and direct benefit. While Atlanta’s growth and wealth spawned leisure communities throughout the south, the Aquarium brings us a destination opportunity – to become a meeting, convention and tourism city. Our success encourages others to say, “Wow, we can do things here because so many people are coming.” The result is a wave of new development opportunities around the Central Business District (CBD).
From a global standpoint, the Aquarium changes Atlanta forever. We have other attractions, but not at the same level. In North America’s hospitality market, there are Las Vegas and Orlando, and iconic cities like New York, DC, San Francisco and Boston with historical assets and natural beauty. Atlanta was not on this map; our airport was our biggest asset. With the Aquarium and the new World of Coca-Cola, we’re in a position to create new assets, museums and attractions.
Will you share insights for other cities?
One successful attraction can be a catalyst, and much can be accomplished with private dollars. First, everyone has to get on the same page about what a city wants to be. With today’s competition, cities need to consider how to achieve “best in class.” Reinvestment in infrastructure, such as housing stock and transportation, a coordinated plan and proper allocation of resources are important. Things don’t just happen because people wish them to. The secret of our region is contributions from our business community in planning and prioritizing.
How does a city achieve “best in class?”
My advice is: Find out what you do best and build upon that. We do a tremendous amount of visioning with stakeholders and constituents. We have a collective plan titled “Imagine Downtown,” which gave everyone a stake in creating a roadmap of projects. Our CBD is the brand of Atlanta, reflecting the region and the state.
What’s your vision for the future?
It’s an interesting time for cities as both Boomers and the under-40 crowd look to live in urban areas. This trend makes for rediscovering cities, and an increasing population affects attractions and public transportation. We’ve discovered the benefit of new attractions. I assure you they’re here to stay because of the positive impact on a city’s health and welfare.
Niagara’s Fury
The biggest challenge in creating a new tourist attraction at Niagara Falls is trying to live up to the main event.
A newly opened virtual reality show delivers a time-lapse lesson about the 10,000-year formation of the natural wonder complete with glacial snow, pelting rain and rumbling erosion, all building to 360-degree helicopter views unavailable from shore.
The $7 million “Niagara’s Fury” is the star attraction of a $38 million renovation of Niagara Falls’ Table Rock complex of restaurants and shops that ushers visitors to the water’s edge.
“In Fury, we wanted the wind to blow, the rain to fall, the sky to open and the earth itself to move inside this building,” said Mike Konzen of PGAV Destination Consulting, hired by the parks commission in 2002 to find ways to more fully reap the benefits of the 6 million yearly visitors to the Canadian Falls.
The large-scale upgrade at Table Rock, the first in 20 years, was considered a must by parks officials struggling to draw visitors against a bad-news backdrop of high gas prices, travel-dampening border regulations and a strong Canadian dollar that deflates U.S. wallets upon arrival.
The PGAV consultants recommended the parks commission “interpret the Falls in a much more interactive way, by providing highly marketable, state-of-the-art experiences,” Niagara Parks Commission Chairman Jim Williams said.
The two-part Fury experience starts off with an eight-minute animated film in which a cartoon beaver named Chip learns the geological history of Niagara Falls.
Visitors then move into the main theater, taking their place at individual safety rails mounted on the grated metal platform. There, the same history lesson unfolds but without the animation or narration. The six-minute show begins with a sudden 30-degree drop in temperature and a windblown snowfall. (The “snowflakes” look and melt like the real thing but they’re actually soap.)
“Exciting, fun but scary at the same time,” is how 10-year-old Ciara Pember, droplets of water still clinging to her nose, summed it up.
The family-friendly Fury, unlike anything offered on the American side of the international Falls, “will create a lot of buzz and will provide a real economic boost to the Niagara Region,” predicted Ontario Tourism Minister Peter Fonseca.
Creators visited dozens of theme parks around the world researching technologies and experiences available to discerning tourists. “Everything from small family amusement facilities in Bavaria to the latest rides in Orlando,” said Joel Noden, the parks commission’s marketing and business development chief. “Just to find out what was out there, what we could do, what we could do different because we didn’t want to do something the same. We didn’t want somebody to say, well that’s like going to Spider-Man (at Universal in Orlando) or the zip line ride in Munich.”
